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Understanding Dividends

Policyholder dividends are a direct way of providing financial relief to the policyholders of an insurance company.  These dividends are generally declared when an insurer has sufficient resources to meet its policyholder obligations and when its operating results are better than expected. Mutual insurance companies (like MLMIC) are generally the ones that pay dividends, since it is consistent with their mission of providing quality insurance at low long term cost to their policyholder owners.

Policyholder dividends are typically awarded as a percentage of the policyholders current premium (e.g., 7.5%) and are often paid as a premium credit upon renewal. Dividends also usually contain an “as of” date, which means that a policyholder must be insured on that date in order to qualify for a dividend.

Meaningful financial relief can be provided to policyholders who qualify for these dividends. Yet few insurance companies pay dividends. Those that do (like MLMIC) have a mission and an operating philosophy that is closely aligned with its policyholders’ interests, which distinguishes them from the competition.

Click here to see our recent announcement of a 7.5% Special Dividend for MLMIC policyholders.

Posted in Dentists, Hospitals, Physicians

4 thoughts on “Understanding Dividends

    1. Yes, it applies to part-time.
      The part-time occurrence rate for Family Practice, exclusive of surgery in Queens is $12,941 ($1.3M/$3.9M limits of liability).

    1. The 20% dividend is applied to your premium after the application of all discounts. Therefore, in your example, the 5% risk management is applied first then the 20% dividend.

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